Orchestrated control of multiple overlapping and sequential processes is required for the maintenance of epidermal homeostasis and the response to and recovery from a variety of skin insults. Previous studies indicate that membrane-associated serine protease matriptase and prostasin play essential roles in epidermal development, differentiation, and barrier formation. The control of proteolysis is a highly regulated process, which depends not only on gene expression but also on zymogen activation and the balance between protease and protease inhibitor. Subcellular localization can affect the accessibility of protease inhibitors to proteases and, thus, also represents an integral component of the control of proteolysis. To understand how membrane-associated proteolysis is regulated in human skin, these key aspects of matriptase and prostasin were determined in normal and injured human skin by immunohistochemistry. This staining shows that matriptase is expressed predominantly in the zymogen form at the periphery of basal and spinous keratinocytes, and prostasin appears to be constitutively activated at high levels in polarized organelle-like structures of the granular keratinocytes in the adjacent quiescent skin. The membrane-associated proteolysis appears to be elevated via an increase in matriptase zymogen activation and prostasin protein expression in areas of skin recovering from epidermal insults. There was no noticeable change observed in other regulatory aspects, including the expression and tissue distribution of their cognate inhibitors HAI-1 and HAI-2. This study reveals that the membrane-associated proteolysis may be a critical epidermal mechanism involved in responding to, and recovering from, damage to human skin.